PwC’s latest read on the consumer mindset and their shopping behavior reveals customers who are eager to return to shopping in-store for the experience while also continuing to shop online for deals and more transactional purchases. The report also showed the importance of ESG practices by brands and retailers.
Of those polled about the impact of inflation, 69 percent said they intend “to cut back on nonessential spending over the next six months,” while 15 percent said they were cutting back on all nonessential purchases. Meanwhile, half of the shoppers polled said they “are extremely or very concerned about their personal financial situation,” while 22 percent said they are “extremely concerned.”
The report’s authors said there were two exceptions, though: ESG practices and the luxury segment. PwC said 70 percent of respondents said they were willing to pay more for food produced by local farmers, “and for goods made by a company known for ethical practices,” including brands that support human rights and avoid animal testing.
With luxury goods, the survey found that 26 percent of respondents said they plan to spend the same amount on luxury goods, while 21 percent said they were planning to increase over the next six months. “Motivating factors include wanting to treat themselves, better product quality and keeping up with trends,” the report stated.
When asked about where they shop, in-store topped the list at 43 percent and was followed by using mobile devices at 34 percent, and then by PCs at 23 percent. The report noted that 11 percent of online buyers say they are switching to in-store shopping. And 43 percent of consumers polled said they plan to increase online shopping in the next six months, which is down from 50 percent in PwC’s prior study.
When asked about some standout data points, Kelly Pedersen, retail leader at PwC U.S., told WWD that the research team has asked questions around ESG and responsible spending in the past, “but we’ve seen a big uptick this time, compared to previous surveys. People are trying to find ways to cut back. But yes, they’re spending their money more responsibly. From the ESG perspective, it has become more important for them.”
Pederson said his retail clients are keeping a close eye on the economy and a “looming recession” that may or may not materialize. But retailers are cautious, and Pederson said they’ve “significantly” reduced their purchases for the spring and summer — some clients by 30 percent. “I think they were a little bit hungover from the inventory woos from last year,” he added.
With lower inventory levels, retailers and brands will need to be smart about marketing products that are in stock. “It’s really about figuring out ways to let consumers substitute the products,” Pederson told WWD. “And although supply chains have been challenged, it’s not what we saw two years ago. It’s not what we saw three years ago. However, it is pervasive in anything that requires electronics. I also wonder, sometimes, if some of the luxury companies have almost taken advantage of the fact that there’s this mindset around constraint supply, and they’re constraining themselves further to create higher prices.”